Researchers at the University of Groningen in the Netherlands have found that long-term revenue guarantees are essential to making large-scale green hydrogen projects financially viable. The study modeled a 200 MW electrolyzer in the Rotterdam-Rijnmond industrial cluster, comparing wholesale electricity purchases, green power purchase agreements (PPAs), and a hybrid configuration combining dedicated renewable generation with PPA-backed electricity supply. The levelized cost of hydrogen (LCOH) was approximately €7.2/kg to €7.3/kg for the PPA and hybrid configurations, compared with €7.7/kg for wholesale electricity sourcing. However, all three configurations remained financially unviable without additional support. Monte Carlo simulations showed that a hydrogen contract for difference (CfD) covering 100% of production over 15 years could significantly improve project bankability by stabilizing revenues and reducing financing costs. Under this scenario, the renewable-integrated configuration had a 0% to 6% probability of negative net present value (NPV), compared with higher risks under shorter contracts or partial volume coverage. The researchers said policymakers should prioritize long-term revenue support, allow integrated renewable energy and hydrogen projects to compete alongside PPA-based developments, and coordinate supply-side incentives with measures to stimulate renewable hydrogen demand.
France’s Council of Ministers has presented its draft 2027 budget law, which aims to mobilize more than €5 billion in private investment in the hydrogen sector through three measures. The first is a double-auction mechanism to support the development of synthetic sustainable aviation fuels (e-SAF), addressing the gap between the 10- to 15-year commitments needed to secure investment and the shorter purchasing commitments that fuel buyers are generally willing to make, often no longer than three years.
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